So You Want A TTC Fare Freeze in 2018

In his continuing program of bribing the electorate with promises that the City cannot afford, Mayor Tory has asked the TTC to bring forth a 2018 operating budget containing no fare increase. This would come, of course, just in time for his re-election campaign where Tory could brag about all the transit wonders he has bestowed on our fair city.

Fare freezes are simplistic approaches to a “transit policy” not unlike fantasy subway maps and promises that tax increases will be held at no more than inflation. Can’t fit it all into the budget? There must be efficiencies, cost cutting that will solve problems, because as we all know public agencies like the TTC are rife with fat just waiting to be trimmed. That’s a great story, and it plays to the wing of Council whose only concern is to be re-elected for keeping taxes down.

The reality is not quite what it is made out to be.

TTC faces a shortfall in its budget for 2018 thanks to increasing costs and expansion of its subway service. The degree of this shortfall has probably been understated. There is no provision for improved service (net of the subway extension) because ridership is expected to remain fairly static. The cost increases cannot be wished away with an appeal to make the TTC more “efficient” both because of their scale, and the many cuts that have been made in recent years responding to subsidy constraints.

Several projects-in-progress are expected to bring efficiency savings to the TTC in future years, but not in 2018. Moreover, some “savings” are really an ability to do a better job with existing resources, not to cut costs.

“Fare equity” means different things to different people, and can be argued from viewpoints that trigger quite different outcomes.

“Poverty reduction” is a key strategy for City Council, but much more as a talking point than a real, financial commitment. TTC fares are part of this strategy, but there is a danger this will get lumped into overall transit costs rather then be recognized as a need for dedicated, separate funding in the City budget.

The inherent economic value of simply having good transit service at an acceptable price rarely enters the discussion even though billions in tax revenue and development opportunities hinge on transit’s existence.

Policy discussions consistently avoid complex issues regarding fare discounts and service quality, and there is little understanding of the menu of options available should Toronto and the TTC choose to pursue them. As in so many past years, the TTC enters its budget cycle in crisis mode – how will we find all the money – having studiously avoided the details of its budget and of revenue options.

Perish the thought that the TTC might actually suggest or even advocate for new fare and service policies without first getting the Mayor’s blessing and staging a press conference to announce his decision.

Fare Policy

TTC’s prime source of revenue is the farebox with much smaller contributions from income such as rent, advertising and commuter parking. None of the non-fare revenue lines can be arbitrarily increased except parking fees, and a large increase would represent only a small gain on the budget overall. Higher parking rates might drive away customers, although it can be argued that the TTC really should not be in this business anyhow. Some lots are being taken out of service for redevelopment.

“Outside City” operations shown below are the services provided at cost to York Region. This will fall in future years as YRT takes over more routes, but with an offsetting reduction in expenses.

Ridership is down from projections in 2017, and so revenue is below target. However, the TTC has more than offset this with expenditure cuts to the extent that a budgeted $14 million draw from a reserve fund will not be required. It is worth noting that there is a $1m parking revenue shortfall for 2017, partly offset by better than expected “other income” (mainly interest).

At $1.16 billion, fares will cover 65.3% of operating costs in 2017. The revenue/cost ratio has been the subject of much debate over the years, and this value is often misquoted simply by looking at the subsidy level without taking into account the roughly 4% that is covered by other income. In any event, Toronto has a high R/C ratio compared to almost all other transit systems, certainly those in North America where values of 50% or less are common (including many GTHA operations). What is a “fair” level has usually been decided by historical trends such as the Davis-era “fair share ratio” where 1/3 of operating costs would be paid through subsidy. There is no magically “correct” value for this, only a question of how much funding agencies, and by implication, taxpayers are willing to spend on transit.

Equally important, but much less commonly discussed, are the questions of fare equity and service quality. One might have a system with a lower R/C ratio, but what quality of service is operated? A higher level of subsidy (and hence lower R/C value) could represent an investment in better service, or it could indicate a city unable to attract riders and running only enough service to “show the flag” and serve a minimal, captive market.

To some budget hawks, any empty seat on a bus is waste, an opportunity for cutbacks, even if this could make transit less attractive. To others, the empty seat is room for growth at minimal cost. The reality will vary from location to location, and will depend on the policy decisions that dictated the service design.

Are fare types balanced among riders in a way that is perceived to be “fair”? What is transit pricing fairness? A charge for service used (distance, time, quality)? A flat fee for system access (passes)? A fee based on ability to pay? Do riders feel they are “getting their money’s worth”, whatever the fare might be?

The problem with discounts remains that if “nobody pays retail”, the total revenue must still fund its “share” of operations. As an example, few riders pays the full cash fare, and the lion’s share of revenue comes from adult tokens (or Presto) and passes. Those media are the base line for any discussion about fare structure.

No matter what adjustment we might make to discount structures and subsidy levels, we will soon be back to the basic issue that costs and the demand for service both go up, and must be paid for with higher fares or subsidies. Any hope that transit will magically break even or [gasp!] be profitable avoids the fundamentals of transit economics and certainly does not address pressing needs on a year-to-year basis. These increases cannot be avoided, and even if every conceivable discount is built into the tariff, fares are going to rise. Fare policy should consist of more than carving up the fare “pie” so that some users pay less, while avoiding the larger question of what services the transit system should provide.

In 2016, over half of all “fares” were paid with passes, based on the translation of pass sales to an equivalent trip count. These riders purchase transit as a flat-price service, not based on a trip-sensitive price, and have an incentive to get as much from their fixed price as possible. Conversely, they see any fare increase as a value in dollars, not pennies, because they pay for all of their month’s fares as a single purchase.

[Adapted from “Analysis of Ridership 1985-2016” available on the City of Toronto Open Data Site]

With the current token rate set at $3, a ten cent increase would bring 3.3% gross offset by whatever ridership loss the higher prices triggered. The elasticity of demand relative to fares is not an exact number because other factors affect a rider’s choice of shifting away from the TTC. Is the service perceived to remain acceptable value for the price? Are alternatives so expensive or inconvenient as to be uncompetitive? Are some trips simply not taken because “choice” rides are unaffordable? The answers to these questions are not uniform across all types of rider, and especially are not the same depending on whether one has unlimited riding through a pass, or pays for every trip.

At 3%, the value of a fare increase would be about $34.8 million assuming it were implemented uniformly across all fare classes. In the face of (at least) a $126 million gap, that 3% does not go very far, and much of it would be absorbed simply by the cost of opening the Spadina subway extension.

Inevitably there are calls to mitigate any increase by selectively reducing or eliminating the effect on certain fare classes, and this is not always offset by bumping others. Discounts are offered to various classes of riders including students and seniors, but most notably frequent users of the system for whom passes are a cost-effective way to cap transit costs.

Seniors were the first to obtain reduced transit fares years ago as their rising numbers became a political force. There are arguments that what was once an impoverished class is now among the most wealthy and this subsidy should be revoked. Of course the problem here is that average perceptions (and not a little jealousy from younger cohorts) masks the fact that not all seniors are rich. An offsetting consideration is that seniors tend not to travel during peak periods, and therefore the cost of carrying them is below the system average, especially when expensive capital assets are sitting comparatively idle.

Another group that lobbied hard and successfully is the post-secondary students who cried poor (think opera with starving artists in a Paris garret) even though it can be argued that there are much more deserving members of the “working poor”, a group that never quite makes it into the charmed circle.

Most recently, children, with no direct lobbying effort, obtained free fares thanks to newly-elected Mayor Tory’s discovery that he needed to “do something” about transit without spending too much money. Free rides for children is a boon to all parents, including the poor.

All of these discounts arise from the premise that some groups of riders, or their families, are disproportionately badly-off and “deserve” lower fares.

Toronto Council adopted a “Poverty Reduction Strategy” which includes reduced fares for various low income groups. The implementation is to be staged over coming years, but as with so many programs, there is no funding unless money is cut from some other part of the City’s budget. There are two major issues with the proposed reduced fare for those in need:

The discount will be to allow regular adult riders to travel at senior/student rates. This means that there is no benefit to riders who are already eligible for this fare class.

There is no guarantee that this will be a separate line-item subsidy. By analogy to seniors’ fares (for which there originally was a dedicated subsidy), the cost of reduced fares for the poor could be lumped in with all TTC costs and compete year-by-year with other demands.

The projected cost of the program is small in 2018, but it builds substantially in future years. Whether Council will remember its “commitment” remains to be seen.

Time-based transfer rules (making one fare valid for a set time period rather than only for a connected, single-direction journey) have been discussed for several years, but they are presented as “too expensive” with a budget effect of about $20 million. The calculation works roughly like this:

About 4% of unconnected trips are taken within two hours of another trip. Therefore, if 100 fares were collected today, 96 would be collected under a time-based scheme.

Of the 538.1 million rides in 2016, 227.4 million paid some form of single fare. If 4% of those fares are “lost” to time-based transfers, this translates to 9.1 million “free rides”.

Depending on the value assigned to these rides, the effect on revenue varies. The average fare system-wide is a bit above $2, but this includes many rides taken on passes that are not part of the single-fare market. The average fare for this group could be higher.

To put this in context, for 2016 there were 21.9 million free rides given to children, albeit at lower cost because the forgone fare is lower.

The debate has always focussed on “cost”, not on the benefits including:

Multi-hop transit trips (or “trip chains”) are uneconomic if a fare must be paid for each hop. Transit use and convenience could be improved if time-based transfer rules were in effect.

The validity of a “transfer” is clearly based on the time a fare was paid, not on arcane rules about routes. This would greatly simplify Presto tracking of “valid” fares and confusion about when a new fare must be paid.

The length of the validity period could vary by time-of-day or day-of-week as an off-peak riding incentive

Fare capping is a variation on the concept of passes, and this is already supported by and used on the Presto system. Rather than buying a pass up front, riders are guaranteed a capped cost regardless of usage over a period of time. Beyond a threshold, rides are free. This scheme has been proposed as the replacement for TTC Day Passes, although it brings its own revenue challenge because riders would no longer have to decide, in advance, whether getting and using a pass would be worthwhile. They would simply enjoy a capped cost of transit on days when they took many trips. A similar scheme could be used for weekly or monthly fare caps. The advantages of capping are that it is automatic for any rider, and that it does not require an up-front investment in a pass.

Distance-based fares achieve “equity” if your definition of the term is “pay for what you use”, but quickly runs into the policy implications of making trips for the far-flung, and generally less prosperous, suburbs more expensive than trips within the increasingly affluent “downtown”. Inter-suburb trips could become cheaper, but with the average trip length on the TTC sitting at under 10km, longer commutes across the City or Region could become a lot more expensive. Metrolinx has studied this option for several years, including detailed modelling of the effect of revised fare schemes on riders, but has published nothing to indicate what these would be or how a new fare structure would reflect policy options. The basic problem here is that unless subsidies are increased, a “zero sum” scheme where total fare revenue is unchanged will trigger big fare increases for riders who travel longer-than-average distances.

The Evolution of TTC Revenues and Expenses

Financial data about the TTC can be challenging to research because reports are produced at different times and on different underlying methods. However, the Annual Report includes a Ten Year Summary whose format has remained constant over a long period. The table below is from the draft version of the 2016 report.

The lowest R/C ratio, 66.7%, came in 2009, the third year of Mayor Miller’s mandate, although this was a short-lived dip.

Today, the adult token fare is $3, and it was $2 back in 2005. However, the increases have not been uniform. There was no increase in 2008, 2009 and 2011, and only five-cent increases in 2012 and 2013. TTC management and the Board routinely talk about how small, regular increases are best for transit riders, but political considerations always win out with a fare freeze as a simplistic “solution” to transit problems.

Over the ten years covered by the chart above:

Ridership has gone up by 17.0%

Fares have risen by 28.9%

The amount of service (measured as vehicle kilometre travelled) has risen by 20.5%, but this is more so on the bus network (28.8%) than the subway (11.4%) or streetcar (11.0%) networks.

The bus and subway fleets are larger (24.7% and 23.9% respectively) while the streetcar fleet declined by 11.7%, mostly in the last year.

Total operating expenses rose by 52.2%, but expressed per trip, the increase was 29.8%. The cost per trip rose faster than the number of trips.

Total revenues are up by 44.9%, or 23.3% on a trip basis.

Subsidy is up by 72.3% (47.7% per trip).

The TTC faces huge problems attracting riders simply because it cannot increase capacity on the subway system (minimum headways possible with existing signals), and there are not enough streetcars and buses to handle actual demand. These conditions will only begin to be “fixed” over the next two years. Ironically, the moment the TTC is able to increase service to address the backlog of travel demand, its operating costs will go up along with the financial demand for subsidy, and a counter-demand that it become “more efficient”.

Future TTC Operating Costs

For its part, the TTC has been less than forthcoming about its budget woes studiously avoiding a detailed projection of future year costs and budget options. The TTC’s Budget Subcommittee cancels most of its meetings, and if there is any informed discussion of budget options by the TTC Board, it certainly does not take place in public. From the TTC’s website:

There is no public indication from Board debates that the members, be they Councillors or “citizen” appointees, understand the complexity of the TTC’s situation, and that it cannot be fixed overnight. Options for fare and service policy rarely come forward for debate, and when they do, there is little information on how the pieces all fit together. “I’ll get back to you on that” is a far too common reply from management, and this arises from the absence of a wide-ranging review.

A glimpse into the situation for 2018 was provided in the City Manager’s report that launched the budget process in May 2017. This shows cost pressures facing the TTC (and thereby City Council) of $126 million broken down as:

$26 million for the added cost of operating the TYSSE to Vaughan

$6 million in other cost increases related to capital projects

$102 million for net increases in the cost of the existing system

$12 million saving of $45m from elimination of ticket collectors and $5m for maintenance of legacy fare gates, offset by $38 million for additional fees to Presto

Other minor changes

[See Tables 1 and 3 on pp 9 and 11]

This figure involves some creative thinking notably as it relates to fare collection costs:

The ticket collectors will not, for the most part, be eliminated but will be redeployed as roving station agents. The saving associated with them will not actually materialize except at the margin where extra collectors might have been required for busy locations. It is not clear whether City Council has actually approved this scheme and its associated cost considering that the City Manager expects to see a saving in staff costs here.

There has been no examination of the true cost of maintaining the new vs the old fare gates and other equipment, and whether a saving will actually be achieved.

The TTC has never published a detailed, consolidated estimate of the costs and savings expected to flow both from the new fare equipment and systems, and from associated changes in staffing both at the front line and in maintenance. This makes the 2018 estimates suspect because they are founded on changes that may not occur, or costs that may be different from original projections.

The TTC is midway through many projects that are expected to reduce its cost base in several areas. However, none of these has yet completed, and some have not even begun. The following table is taken from the TTC’s November 21, 2016 Operating Budget Report at p 11.

Across the organization, the amount shown here is roughly a 10% saving, although one must be careful both of double counting and of prematurely booking anticipated savings.

Presto savings are already included as a factor in 2018 projections.

One person subway operation will not be in place on Line 1 YUS until 2020, and on Line 2 BD until at least the mid 2020s.

Office consolidation will be triggered whenever the TTC moves out of many existing buildings into a new main office rumoured to be sited on the Eglinton Station lands. These will not be available for construction until the early 2020s.

Reliability Centred Maintenance is a program to pro-actively repair buses before they fail. Council has not funded the startup costs of this program, and so the saving in future years may not be obtained.

SAP is a financial management system already used by the City of Toronto, and it will replace many archaic applications still at the TTC.

CAD/AVL (VISION) is the replacement for the vehicle location and tracking system which is now three decades old. The savings suggested here may be offset if the TTC chooses to increase the level of route supervision to take advantage of the new system’s features. This will not be fully in place until about 2020.

Wheel-Trans savings do not affect the TTC’s main operating budget as W-T is separately funded.

The LRV fleet savings relate both to reduced maintenance costs and a slightly smaller operator workforce for fewer cars than in the existing fleet. This will not be fully in place until about 2020.

In brief, there are future “efficiency” savings in the pipeline, but they stretch over many years and their effect on any one budget year will be small. Moreover, these are one-time savings.

There is no estimate of the cost effects of the new LRT lines (Crosstown and Finch) – how much will Metrolinx charge the City as a contribution to operating costs, and what will the TTC’s direct costs be for that part of the operation they perform. These too are in the middle future, but will come into play in the same period as some of the savings touted above are expected to occur.

The TTC’s Operating Budget can be broken down into major segments to get a sense of where the money goes [from Appendix F of the TTC Budget report]:

The chart gives an indication of where major savings or cost pressures will come from. Note that maintenance costs shown here are day-to-day running maintenance, not the major capital projects such as replacement of vehicles and infrastructure that collectively amount to almost $1 billion in the Capital Budget.

Over half of the total budget relates to direct provision of service including maintenance of the fleet and infrastructure.

All of these costs tend to rise as the result of two factors: inflation, and increases to service levels. The combined effect of these is rarely less than inflation itself, but there is a polite fiction at Council that somehow TTC costs can be constrained to no more than inflation, or even reduced to fit a “flatline” directive for the operating subsidy.

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32 thoughts on “So You Want A TTC Fare Freeze in 2018”

They should just do the time based transfers on presto. Leave the existing transfer system for paid fares…this would reduce the cost to way below 20$M. The cost would increase over a couple years as they get rid of tokens and cash fares and move to all presto.

Wonder if someone could figure out the cost based on the existing presto usage…

Steve: Not sure what you mean by “leave the existing transfer system for paid fares”. Transfers as we know them should disappear, and fare receipts should say “valid until …” to be unambiguous.

The problem with fare increases is that it is not tied to any improvement. It is much easier to accept if some visible improvement is seen. For example, GO Transit hiking fares and introducing two way all day service at the same time. Right now, a fare freeze is announced but the service will be reduced.

The federal government just announced money for an expansion of the Toronto Bike Share. With 70 more stations, for most people living south of Bloor, there is less reason to use the TTC for short trips. For short trips, a bike is often faster. If people make short trips with bike share, Zipcar or Car2Go or Uber, this will reduce the demand for passes. If the TTC wants to exit to short haul business, then a fare increase would do it. Otherwise, to have good service for all types of travelers, fares will need to be competitive with better services.

120 minutes fare will become more important as the price increases. For someone going to the doctor, the grocery store and back home. This will cost 3 fares using today’s rules. At $4 (rough number) each, it gets expensive very quickly. A 120 minutes fare will make transit more competitive provided if this individual can chain the trips tightly. There is also no way to program Presto for the current transfer rules especially if people do not need to tap out when switching vehicles.

Steve: Presto works for existing transfer rules provided (a) that the vehicle GPS units correctly identify the location where someone taps, (b) the specific transfer one makes is built into Presto’s tables and (c) the “tap on” occurs reasonably close to the actual transfer location. However, there are many ad hoc transfers that are perfectly legal, notably for diversions and short turns, that Presto cannot deal with. The original plans were to go with a time-based fare as is used elsewhere in the GTHA, but the TTC is still dragging its feet on implementation. No politician has embraced the idea as an election promise, or as something that riders “deserve”.

This sure has the reek of election campaign, and as per usual for Caronto, the carservatives are in full denial mode and we can Never Ever think of charging the cars far more appropriately than what is/isn’t charged now. An older stat from Vancouver was a $2700 annual avoided cost and subsidy for each car which would be about $2.7B worth in Toronto, ignoring inflation over 20 years. Even if we split this three ways for the three levels of government, having a degree of user pay for the vehicles (including stormwater services for pavements as one eg.), that would be a $900,000,000 difference. Apply a similar user pay for automobility as for the TTC, and heck, that’s still a $hipload of extra cash though we cannot trust the current crowd that seem to be in charge to have smart expenditures, eg. that Suspect Subway Extension.

Upshot is that if we actually had some fiscal conservatives, we’d have a call for say a $200 Vehicle Registration Tax, as a minimum starting point. Sure, it’d be a shock, but as Newman and Kenworthy observed awhile back in Sustainability and Cities in Appendix 1 p. 351, “the trail of road expenditures in most cities is a tortuous path”. (They might have chosen ‘crooked’).

And who of the TTC Commissioners will serve the public and transit by thinking a tiny bit beyond the confines of transit mobility to overall mobilities? Given how this Clowncil majority has specifically voted to ignore facts in transit decisions in a 23-19 vote last December on a motion from Councillor Matlow, the majority will likely continue to have head up exhaust pipes.

Look at all those canceled Budget Committee meetings! I believe it is Grand River Transit Board (Kitchener/Waterloo) that provides that region annually with three potential budgets: an austerity with reduced service, current service levels, and significantly increased service levels, generally speaking. That gives the board members an actual role in overseeing the governance of the system. In Toronto none of that happens.

One day the Mayor decides that passengers under 13 ride free. A few months later, there is now an premium express bus running because a council member got a motion approved at city council. On and on. What is the point of being on the TTC board? Steve, you were right not to put your name forward. You would have torn all your hair out and be bald now!

I think the reason that the TTC hasn’t introduced time based transfers on Presto is because they don’t see it as a necessity or something that enough people will use to make it worth having it in the system. Most people will usually only transfer from one route to another or to the subway. Well a two hour transfer sounds great to the people that would use it to go shopping it really isn’t all that particle. Even Go Transit has limitations in it’s presto system, like for example if you have a fare programed as default fare in your account and you try and tap again before three hours has expired you can’t use it unless you override the system and you will need to tap out at your final destination.

Steve: There are a lot of people who would like to make a series of short local trips, but it is impractical to do so because the cost is too high. They may not count in tens of millions, but they exist. Moreover, the benefit of eliminating the pesky transfer rules will make everyone’s life (including operators and fare inspectors) a lot easier.

As to the GO Transit implementation, it’s a kludge arising from their recognition that tapping off is a pain in the ass, and they have the default fare to avoid it. Of course a similar scheme is impossible on the TTC, but Metrolinx would still love to foist fare by distance and tap offs on the much more numerous TTC riders.

Steve, I will illustrate an example where Presto is blind. Suppose one taps the Presto card at Scarborough Center station. This individual will travel southwest to Spadina and College. There are many permutations, but I will list three where Presto will be blind to the route. If Presto does not know where the passenger is moving, it will be hard to apply logic to an unknown.

1. Line 3 to Kennedy, Line 2 to Main St Station. Then board the 506 tram
2. Line 3 to Kennedy. Line 2 to Spadina Station. Then board the 510 tram
3. Line 3 to Kennedy. Line 2 to St George Station. Line 1 to Queens Park Station. Then walks

There are no additional tap in or out. All Presto knows is that the person paid a fare at Scarborough Center Station. Switching metro lines or boarding a tram at a metro station does not require additional taps. Now that this person boards the northbound 510 tram at College. Is this a new trip or a transfer? Did the person ate a few Popeye’s chicken at the intersection or did he purchased some books at the U of T Bookstore? No one knows and Presto certainly does not know.

Even if transfer logic can be programmed in, it will require a lot of processing power. It takes about 40ms on the LTE network to send a packet from the Presto reader to the server. The server would then have to decide which permutations are transfers and which one are a new trip. The server would have to compare the trip history to the rules and then makes a decision. This decision would have to relay back to the Presto reader which takes another 40ms. So, we have a minimum 80ms round trip time just for the communication before adding the server processing time. The Presto card readers inside the stations have it a little easier as they have a WIFI link to the Presto server. But, the processing time still applies.

A time based system is much easier to implement. All the server has to do is compared the tap in against the initial tap in time. If there is weather issue slowing down transit, the TTC can easily extend the time. For example, instead of 120 minutes, it can be extended to 140 minutes. This will eliminate a lot of customer service issue. If someone’s Presto card goes into negative, there is a fee. How happy will someone be when they are billed a fee due to a TTC vehicle not being on time.

This is just the surface. There are other Presto issues too. Using the TTC times two with Metrolinx promotion, how do the transfer rules apply? Suppose I take the 501 tram to Long Branch GO. Using the LSW train to head to Union and use the LSE train to Eglinton GO. Now, I get on the #9 bus. What rules does it apply? If the transfer rules apply as if I am boarding the #9 bus as a new customer, this means I can backtrack to Long Branch without paying an additional fare. After all, once I get on the #9 bus, it takes me straight into the fare paid zone at Warden Station. From there, I can take Line 2 all the way to Islington and switch to another bus.

With a time based system, all the server has to do is freeze the time remaining. For example, if I have 100 minutes left when I get to Long Branch GO. Once I get off at Eglinton GO, the system can just resume the 100 minutes when I get on the #9 bus. Much easier to program for.

Steve: The situation changes (but still has problems) once Presto shifts all of its processing to the back end of their system where fares are reconciled after the fact rather than computed on the fly. This will be necessary to support generic bank cards and phone apps where program logic cannot be stored on the card. A “tap” is merely an identification, nothing more, and the system has to figure out the appropriate fare by stringing together your taps. In a flat fare, time-based system, this is quite simple.

The elephant in the room is that, so far as I can tell, Presto as currently implemented on the TTC mostly does offer two-hour transfers. I see this all the time:

Board 506 Carleton at Elizabeth, ride to Roncesvalles. Have lunch. Board 504 King, ride north to the subway, ride the subway home (I live near Christie Pits). Presto calls the boarding at Roncesvalles and Howard Park a transfer, and I am charged one fare, despite more than an hour between vehicles.

Board 6 Bay at College, ride north to Charles. Have lunch. Walk to Bloor station, board the subway. Ride to Summerhill station. Run a few errands. Board 5 Avenue Road northbound to St Clair, transfer to 512 St Clair, ride to St Clair West station, transfer behind the turnstiles to 126 Christie, ride home. One fare for all that.

Board the subway near home; ride to Eglinton station; catch a bus to Mount Pleasant. Do some business there. Board another bus back to Eglinton station; ride the subway to College; tap onto 506 Carlton. One fare for all that.

So far as I can tell, any tap after the first within some period (roughly two hours but I haven’t tried to work it out exactly) is called a transfer, no matter where, except certain cases tapping at a turnstile.

Given how unreliable the Presto readers are–it’s not unusual for my tap to be reported several blocks from where it actually happened, and sometimes it is 5-10 km away–I can see why they adopted this strategy. I wonder whether the readers will ever be accurate enough to enforce the traditional rules properly, though.

However great the revenue loss from two-hours transfers, it is already happening for those who ride with Presto. Does the TTC have any way to measure that, to get a more-realistic idea of the lost revenue? Should they make it official temporary policy to encourage people to adopt Presto, and at the same time see whether it induces more ridership?

(Apologies for my somewhat ponderous writing; it’s been a long day and a long week, and the TTC is to blame for none of that.)

Steve: The TTC could make an official two hour fare an incentive to move to Presto. Silk purse out of sow’s ear and all that. But they are too busy protecting John Tory’s butt on taxes.

Benny Cheung: a fare freeze is announced but the service will be reduced.

Well, service reduction makes perfect sense because demand/ridership is falling. When demand/ridership increases, you folks use it as an excuse for demanding more service but when demand/ridership falls, you still demand more service. That makes no economic sense and goes a long way to explain why the TTC is always having a budget crisis when most other major transit agencies in the world seem to be doing just fine.

Remedy: I suggest that the next CEO of the TTC be an accomplished economics professor who will teach the basics of economics to other TTC staff and then implement the same. That would be the wise course of action to take when Andy Byford’s term expires rather than blindly renewing it with no accomplishments to show for it.

Steve: “We folks” also know that one reason ridership falls is that service quality could be improved. This is basic marketing.

Also, Toronto is not the only city wrestling with changes in demand. It is a North American wide phenomenon, not helped one bit by transit’s continuing to ceded more and more of the market to other forms of travel.

I mean don’t change the existing system that is going away. Just change presto.

For cash fares you keep getting a paper transfer like you do now – until they start deploying the single-use presto cards on paper or however that is going to work. If you use presto – they don’t give you any paper now or in the future because it’s on the card as 2 hours from when it was scanned.

So the time system for now would only work with presto products – with usage scaling up over the next two years – so it wouldn’t cost 20$M this year – probably only 2 or 3. Next year it would be 10-15 and then once presto is implemented it’s 20$M.

Steve: Actually, timed transfers could be implemented for the residual non-Presto fares (cash). Already, the fare machines on new streetcars dispense receipts that are timestamped, and on vehicles with conventional fareboxes, operators could be instructed to periodically reset their transfer cutoff times (just as was done decades ago in Vancouver). The real challenge is the subway, but if most fares are moved to passes/Presto, then fare receipts can be issued by whatever device people put cash into.

But, yes, as a piece of marketing, implementing a two hour fare on Presto itself would be a great pitch, an incentive to get people to switch over, and it would avoid the inevitable buildup of complaints from riders who discover they have been overcharged.

An economics professor to head the TTC — that’s a funny one. Economics professors have only recently discovered that people aren’t ideal rational choice-making machines and that markets don’t quite work as simply as Adam Smith described (hence the list of recent Nobel prize winners in economics). An economics professor can be expected to be a clueless disaster as CEO of any company or organization.

I suspect that the person Jason is really pining for is one of those “genius” MBA leaders, whose business strategy is to impose arbitrary cuts and then fire whoever doesn’t comply. Maybe Jack Welch, he of GE fame, is available? Of course these type of leaders are always available, as their solutions work in the short term — for stock prices, anyway — and it’s the clever MBA who gets out with all their stock options before their “genius business strategy” catches up to them. I would suggest that the TTC has had its share of these types in the past….hence where we are today.

I think that [what] the TTC needs is someone with a keen interest in operations and the ability to shift the TTC’s culture. Byford isn’t that person. Neither, in my estimation, was Gary Webster.

By the way, I read a quote attributed to Andy Byford, where he says something to the effect that “I no longer need to raise my blood pressure, so I have stopped reading certain blogs”. I wonder if this blog is one of those.

Steve: I am reliably informed that Andy Byford (a) reads this blog and (b) it does not raise his blood pressure too much.

As for an Ops minded CEO, we had one once, David Gunn. He was driven out by Tom Jacobek (then Budget Chief) and Howard Moscoe (then TTC Chair).

As for “economists”, we see a lot of pseudo science these days from the MBA crowd in the form of “cost benefit analyses” where many of the factors are “soft” values attributed to time spent/saved, environmental benefits, etc. There is nothing wrong with trying to quantify these as a way of comparing options, but when they are converted to dollar values (dollars that no entity will ever recover to offset an investment), we enter the realm of pure bullshit. But it looks “professional” and keeps armies of consultants busy turning out meaningless numbers. Politicians don’t have to think because the debate is reduced to a single-dimensional analysis of “net present value”. But don’t try to borrow money based on that “value” because there is no way for the lender to access the supposed benefits.

As an aside, a preview button would be good. Not sure it’s available for WP comments.

Steve: Nope. You have to proofread what you wrote and throw yourself on the mercy of the editor [me] to fix it.

Some people leave comments here and the versions you see make them out to be paragons of the language, rather unlike the originals. If I want them to look like idiots, I don’t fix anything.

Fare capping is a variation on the concept of passes, and this is already supported by and used on the Presto system. Rather than buying a pass up front, riders are guaranteed a capped cost regardless of usage over a period of time. Beyond a threshold, rides are free. This scheme has been proposed as the replacement for TTC Day Passes.

Brad Ross was on Twitter promising this feature would be in by the end of the year back in what? 2015? It’s been so long that I confuse myself about it. It’s almost as late as the Bombardier streetcars.

The elephant in the room is that, so far as I can tell, Presto as currently implemented on the TTC mostly does offer two-hour transfers.

I wonder what proportion of the ridership “drop” can be attributed to Presto users taking advantage of this unpublicized feature.

All this talk of Presto transfers assumes that nobody cheats in the existing system. I see people board buses with outdated/same route/clearly impossible transfers fairly frequently, and ops usually let them on.

Regarding distance-based fares, there’s another option for the TTC to pick from. Don’t raise long-distance fares and introduce short-distance ones (for, say, up to 4 streetcar or bus stops, and maybe one subway station or two). Vienna’s had this system for a while. Granted, in order to recognize the end of a trip, the Presto user would have to tap off explicitly. That seems like a fair request to make of people so they can save a dollar or however much.

The variables that the TTC has at hand to make this work are the length of a short-distance trip, and the discount. Ideally they could optimise those variables to get more extra ridership than they lose in revenue, from people who would have not taken transit before just to go a couple of stops. If not, the increase in general fares should still be much less painful than increasing the long-distance commuter fare.

“The elephant in the room is that, so far as I can tell, Presto as currently implemented on the TTC mostly does offer two-hour transfers.”

Mostly? Certainly, if you are creative in your routing you may take advantage of a pseudo-two-hour ride window. But you cannot enter a subway gate more than once, or board and reboard a surface route travelling in the same direction. So if you are in the core with lots of surface route options where you can chain trips, sure.

But passengers want to travel along King while stopping for coffee with a friend, picking up the dry cleaning, grabbing take-out for dinner and collecting the muntchkin from daycare. And Presto, as currently implemented, considers this behaviour to be multiple chargeable trips.

“The elephant in the room is that, so far as I can tell, Presto as currently implemented on the TTC mostly does offer two-hour transfers.”

“I wonder what proportion of the ridership “drop” can be attributed to Presto users taking advantage of this unpublicized feature.”

I unintentionally did this yesterday. A trip from King East and Ontario St. to University, where I spent 30 minutes on an errand; then boarded the subway at St. Andrew south/north to College where I shopped at Loblwas for 30 minutes; then boarded the 505 on diversion at Carlton and Church and rode it back to Dundas and Ontario. This whole trip took 92 minutes. Presto charged a fare only on the first leg.

Jakob said: “Granted, in order to recognize the end of a trip, the Presto user would have to tap off explicitly. That seems like a fair request to make of people so they can save a dollar or however much.”

While I can see (and see elsewhere) that everyone tapping out of a subway is not too disruptive (if the gates work properly) and means that a subway (only) user who has no ‘ticket’ has to pass through two sets of gates (entry and exit) but tapping off surface vehicles would create a real mess. If one wants to ‘reward’ short trips just make a timed-transfer valid for less than the (usually suggested) 2-hours. PRESTO can clearly not deal with the current arcane TTC transfer rules (e,g. the continuing need for paper transfers for PRESTO users transferring from subway to 121 bus at Union). Adding a layer of ‘fare by distance’ confusion would clearly not work.

Had a look at the PRESTO FAQ on the TTC site recently? There are 10 points on transferring and when to tap/when not to tap and customers are expected to know all the edge cases by heart. I doubt even enforcement personnel could name them all.

I can’t say it enough: TTC demands to have their last century transfer rules enforced by PRESTO is not tenable and management needs to get a clue.

An ops-minded chief general manager? As Steve said, that was David Gunn, who I just spoke with not an hour ago on a rail passenger matter. As he always says, Toronto didn’t need a chief general manager during his time because it already had three: Mike Harris, Mel Lastman and Howard Moscoe. Have things really changed except for the characters?

I do note that some of the “usual suspects” who had a hand in awarding Bombardier the streetcar order are still alive and well and living at City Hall and Queen’s Park.

For cash fares you keep getting a paper transfer like you do now – until they start deploying the single-use presto cards on paper or however that is going to work. If you use presto – they don’t give you any paper now or in the future because it’s on the card as 2 hours from when it was scanned.

YRT introduced the time-based transfer in September 2005, when they started VIVA service. At that time, they changed the format of the transfers for their non-VIVA routes so their tear-off would allow setting an expiry time for the transfer, instead of the time when the bus started its current run (as is done on the TTC).

This meant that operators had to change the cut setting every 15 minutes along a route, which can be simply a pain in normal circumstances to difficult during peak times. Many operators therefore simply set the tear-off expiry further in the future so they wouldn’t have to change it every 15 minutes. Thus, a rider paying their fare on a non-VIVA route typically got a transfer that was good for anywhere from 2 to 3 hours. On one occasion, I paid my fare at about 5:30 pm that showed a 9:00 pm expiry time. Riders validating a ticket or purchasing a cash fare at a VIVAstation would get exactly two hours to the minute.

When Presto was rolled out on YRT, the operator’s terminal replaced the transfer cut-block since it was capable of issuing a paper transfer, only now it was for exactly two hours, to the minute.

When Vancouver switched from the cut-block transfers to machines that could read a franked ticket, the discretion that an operator could apply to their 90-minute expiry when a delay was known was lost as the machines that indicate if one’s ticket is still valid or not was unaware of delays and did not have an extension capability.

Calvin said: YRT introduced the time-based transfer in September 2005, when they started VIVA service. At that time, they changed the format of the transfers for their non-VIVA routes so their tear-off would allow setting an expiry time for the transfer, instead of the time when the bus started its current run (as is done on the TTC).

I have no doubt that it can easily be done with paper and the existing system…the goal is to minimize the implementation cost by not changing things that are going away, and reducing the initial cost to the TTC by phasing it in as part of Presto ramp-up (it’s politically a lot easier to say it’s only going to cost us 5$M this year vs 20$M and is a big win for an election year)…then after the election you can jack up fares, or property taxes by enough to cover the 15$M over two or three years as everyone comes on to presto (but you can still say it only cost 5$M a year, wink wink nudge nudge)…and it’s all under the covers of a fairly complicated budget process…

They already do this with service increases where it is going to cost 20$M this year because the service increase only starts in June… and then the next year it costs 40$M for the full year…

This all falls under getting stuff done and making yourself look good while doing it…even though everyone knows it’s more complicated…but nobody except maybe Steve would point it out 😉

There is one major “elephant in the room” that is being very quiet, but is slowly, silently sneaking into the big picture of “freezing the budget” for 2018. That being the date of March 31, 2018.

What is significant about this particular date, you might ask? This is the date that the TTC’s collective agreements with its 3 main Unions (ATU 113, CUPE 2, and IAMAW 78) expire. Contract negotiations will be starting by the end of 2017, with serious negotiations ramping up in 2018.

How will this impact a budget freeze? TTC Unions do not have the right to strike (Ontario Bill 150 removed that at the request of Rob Ford’s Toronto City Council). However, if negotiated agreements cannot be reached, the talks end up going to a Provincially appointed Arbitratior (who is agreed to by both TTC and the respective Union). TTC agreements contain a continuation of service under the expired agreement until a new agreement is ratified by the parties. The new agreement is the applied retroactively to the expiration date of the previous agreement.

It shall prove to be interesting to watch this play out during the same year as the Municipal Election.

George Bell, I understand the phase-in that you have advocated for time based transfers and also appreciate the advantages from both a budget perspective and also as an encouragement for Presto adoption. However, I can hear the objections already from advocates for the less well off in our society. Those who have the fewest resources, and who pay by CASH by necessity would be adversely affected. There are those who do not have the resources to fund “stored value” or in fact to purchase a Presto Card in the first place. Fundamentally I agree with these spokespersons, though sometimes they make “broad brush” objections to arrangements that benefit most patrons without considering other solutions that could work for all citizens. In this case I think the progressive wing of council would be swayed by the objections and the regressive wing would not want to spend any money at all on two hour transfers.

The best solution is probably to craft together a coalition that would support two hour transfers for all and provide the full funding to support the change.

Collective agreements, inflation, population growth, fuel increases, subways to York – these do not exist in John Tory’s world. What we need boys and girls are “efficiencies”. Tighten the belt. All departments can do it. It worked last year and the electorate loved it. It has to be done again – because Doug threatens re-election.

If the department is swimming pools or libraries we suffer a small erosion of what it means to live in what was once a wonderful city. When it comes to transit, we face a large increase of what it means to have overcrowded vehicles and passengers left behind. It really hurts to be left behind when you are potentially late for work and even more when it is minus 20C.

For the TTC, efficiencies are just a joke. We are looking at massive service reductions in order to live at last year’s budget. A populist Mayor even wants to block a fare increase – he won’t let us pay for the service we need and want. Is he doing a favour to those left behind – late for work – and freezing when it is minus 20C. I’ll bet that extra dime is not that valuable to even the poorest amongst us, if it means late to work – and the deduction of an hour’s wage – even at our pathetic minimum wage – 100 10 cent fare increases could have been funded with the same money. The awful TTC service only has to result in three lost hours at minimum wage before a 10 cent fare increase – resulting in less awful service – would be cheaper.

John “I am not a Ford” Tory needs to learn that to be Mayor of Toronto he needs to provide services to the people. The TTC needs more money – a lot more money. Figure it out John and do it.

The Star has come out in favour of a fare freeze but they, like all the politicians, have not looked at the impact on funding. Unless the city and or province are willing to pay more for transit then a fare freeze is not a viable option. The city really needs to make its taxes similar to those in the 905 before they cry poor. Someone has to start paying the bills.

Steve: What is particularly annoying about the Star’s editorial is that they make the mistake of confusing capital spending (new buses, new signal systems) with operations and service quality. Fares do not fund the capital projects, but they (along with operating subsidies) do fund service.

Also, projects the Star talks of as if they were complete are still very much in progress, and so we’re not as far down the road of improvements riders can see than their piece suggests. It feels very much like this was written with the help of notes from the Mayor’s office.

Well, I sure don’t, when I pay the price of an Adult Metropass (regular price). I think we need a fare freeze since the price is already too high for the service that is delivered. Not to mention that I feel that raising fares without significantly improving service is just a path to a vicious circle of higher fares, declining ridership, declining revenue, and declining service levels.

The subsidy needs to be higher. Fares shouldn’t increase, they should be lowered in order to attract more riders. The system needs to be “pushed” into a different (and hopefully stable) equilibrium point.

Steve says, in response to Norman Wilson: “The TTC could make an official two hour fare an incentive to move to Presto. Silk purse out of sow’s ear and all that. But they are too busy protecting John Tory’s butt on taxes.”

Ironically, John Tory had no qualms about placing the additional “financial burden” of carrying 12-and-under passengers (and those 12-and-over who can get away with it due to looking young enough) for free on the TTC system. And I’m guessing that the extent of cost-benefit research that was done for this was: “How good will this look to all those parents with kids who now won’t have to pay a 2-way fare for each of their offspring – especially in 2018 as I remind them when it comes to re-election time?”

Given all the issues with bad Presto machines misreading taps and overcharging fares to passengers – who are most likely not even aware of it happening – the 2-hour transfer would help simplify most traveller’s outings, resolve most payment/non-payment issues rather quickly, free up drivers’ attention for driving, encourage greater use of transit overall and ensure a consistent service throughout the system.

Whatever the “cost” for the 2-hour transfer, Mr. Tory and the TTC can’t give children free passes in front of the TV cameras, smiling out of one side of their mouths and at the same time cry poor out of the other side of their mouths about the “financial burden” of giving away “free rides” over 120 minutes. The vehicles are out there anyway and, other than during rush hour, aren’t jammed to the rafters with commuters, so $3.25 cash is $3.25 cash they didn’t have before and their stats get a boost with each “new” passenger that uses the system when they might not have.

The politicians have to stop looking at the TTC as a money pit that gives nothing back – especially when the Gardiner Expressway upgrades/repairs seem to get funded with relative ease (not carte blanche, but – really!) Thousands of people use the transit system every day to get to and from work and do their day-to-day errands and get to activities across the city from morning until night. The politicians always need to be thinking of the TTC as an IMPORTANT and INTEGRAL part of the city’s fabric; but they should also – and, more crucially – be thinking that making things easier and more efficient for all the people who use it (and who also happen to pay taxes) shows TTC riders that they, the riders, are not Second- (or Third- !) Class citizens and the City is willing to put the money where their mouths are, so that there are smiles on the mouths of the riders more often than not!

I wonder if transfers will just go away once Presto is the only form of payment. They are in the process of putting the monthly metropass in place. From my understanding, they have programmed into the Presto system for daily and weekly capping. With those in place, you will be capped at a daily or weekly rate once you reach the cost of those to pass. In a way, it kind of makes sense to ditch transfers and just charge you until the daily or weekly cap if you don’t have a monthly pass on your presto count.

Steve: As long as the TTC still accepts cash fares, there has to be some form of receipt whatever it is called.

Steve: As long as the TTC still accepts cash fares, there has to be some form of receipt whatever it is called.

Only if proof of payment is required, which limits the requirement a bit, especially once the subway goes pure-Presto and the streetcars are all Flexities. (I realize that the last may not happen before the heat-death of the universe.)

In Los Angeles, cash fares are accepted on buses, but you get no transfer privileges. If you pay with TAP (their fare card), you get unlimited travel for two hours. Subway turnstiles accept TAP only, and only TAP is allowed as proof of payment on light-rail lines; all subway and light-rail stations have fare-vending machines that can add value to a TAP card or sell a fare on a new card for $1 extra (but it’s a permanent card).

Free transfers are still allowed with a Metrolink (commuter rail) ticket, but that is now implemented by putting a chip with a Day Pass for the current day in the ticket. That’s the only paper farecard I know of in LA.

All this is just a proof of concept: if the TTC want to stop issuing transfers to cash customers, it’s very simple on buses, and since cash really means use-fare-machine on the subway and the new streetcars, it’s not much harder there.

Steve: I suspect that the elimination of a cash fare would meet with strong objections unless there was a time based fare available via some medium that Presto can read. There is a big issue generally with the TTC’s focus on regular riders for Presto to the detriment of occasional riders, or those who do not want to invest in passes up front.

Steve: I suspect that the elimination of a cash fare would meet with strong objections unless there was a time based fare available via some medium that Presto can read. There is a big issue generally with the TTC’s focus on regular riders for Presto to the detriment of occasional riders, or those who do not want to invest in passes up front.

I think the TTC is probably figuring that by the time Presto is available everywhere that people won’t be using cash fare anymore because of the convenience of it and being able to use in on other modes of transit besides the TTC.